MGT Capital Investments Inc (OTCMKTS:MGTI) Finally Closes On Its Demonsaw Deal

Back in May 2016, MGT Capital Investments Inc. (OTCMKTS:MGTI) announced that it intended to acquire an entity called Demonsaw LLC. The acquisition, at the time, was intended to underpin a pivot for the company, and an entry into the tech and cyber security space. We covered MGT a few times in and around the time it first associated itself with Demonsaw, and the idea was to pick up Demonsaw and then run with it with John McAfee at the helm.Those familiar with the company will be all too aware that this plan didn’t exactly play out as hoped. The initial proposal was to issue 44 million shares to cover the acquisition. Shareholders approved the issue, and Demonsaw agreed to terms, but the NYSE did not. The exchange blocked the issue, arguing it fell foul of exchange regulations.In the wake of the exchange's blocking of the issue (and by proxy, the acquisition), MGT delisted (reportedly, voluntarily) and now trades OTC. We noted at the time of the delisting that the move would give the company a second chance to try and acquire Demonsaw – something that we see as critical to MGT's execution of its stated strategy of being at the cutting edge of cyber security.Well, our expectations were just validated.MGT announced on March 3 that it has acquired a 46% equity interest in Demonsaw. The deal is structured a little differently to that which the company first proposed – most notably, it's an MGT direct stake acquisition, as opposed to the folding of Demonsaw into D-Vasive, one of MGT subs – but the end result is pretty much as it was always intended to be. Demonsaw is on board with MGT, and importantly, its founder, who goes by the moniker Eijah, is now in cahoots with McAfee at the cutting edge of the space. There's value in this partnership alone, irrespective of the product that comes with the stake acquisition (a file sharing platform called Demonsaw), and the two joining forces and – by proxy of the companies they have joined forces to lead – aligning their interests with MGT shareholders. To put this another way, if as a shareholder you wanted to handpick a duo to push your offerings into the cyber security space, you'd be hard pushed to pick a stronger team than McAfee and Eijah.Not only this, but the deal has closed out on what look like far more favorable terms (from a sharehlder's perspective) than those initially put forward; those that NYSE blocked. Specifically, MGT has issued just 2 million shares (as opposed to the above mentioned 44 million). Sure, the company only picked up 46%, but it's enough to align interest, and with less than 5% of the initially planned share count having been issued, it dramatically reduces the dilutive impact of the deal.So what's next?Well, while the above discussed acquisition developed to fruition, MGT worked on the development of other areas of its operations, and is now a big player in the North American bitcoin scene. It's mining operation is producing 100 bitcoins per month (which at current rates comes in at around $120,000 per month) and a mining pool is about to open, which should allow the company to further leverage its position in the space – just in time to coincide with a steep value upswing in the price of underlying bitcoin. We're looking to the opening of said pool to public participation as a major driver going forward. We're also looking for some clarification on how the Eijah/McAfee/Demonsaw rollout is going to materialize. The potential of the deals underlying product is not fully realized yet, as in its current form its little more than a secure file sharing platform but it will no doubt integrate with MGT's proprietary technology going forward, and repackage into a full suite platform. We're looking to any information regarding this integration as offering clarity into the forward strategy, and in turn, offering us some insight into market potential medium term.We will be updating our subscribers as soon as we know more. For the latest updates on MGTI, sign up below!Disclosure: We have no position in MGTI and have not been compensated for this article.